As the world's finite gas supply continues to dry up, automakers are continuing look to other sources to power their cars. Hybrids and batteries have been popping up all over the place.

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But what if there was renewable, carbon neutral way to fuel a car that acted like gasoline? Audi thinks they have it with e-gas, and it could revolutionize fuel.

(Full Disclosure: Audi wanted me to hear about e-gas so bad that they flew me to Munich and took me to an all day tech workshop in a converted warehouse. I drove cars, heard lots of German, and ate a sandwich that had something called "rocket pesto" on it. I think it's what they eat on the space shuttle.)

Audi has been showcasing electric powertrains extensively over the last few years on the auto show circuit with its e-tron concepts, and has even broken the Nurburgring record for electric cars with the R8 e-tron below. But there are still a few overarching problems with electric powertrains.

It's official. The record has been set. Audi's 375-hp electric car — the Audi R8 e-tron — …
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For one, they still have a limited range. It does depend on the batteries, but nobody is really getting over 250-300 miles out of a car these days. And when that range is burnt out, there are charging times that can take hours. Gas powered cars take five minutes to fill up and get way more out of a tank.

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The real issue is that we have a huge infrastructure for fueling cars with gasoline, diesel, and even natural gas, but the electrical grid, while gigantic, isn't properly equipped to charge thousands, let alone millions, all at once. That's why Audi has been researching a way to make carbon neutral fuels for its cars. And they think they may have cracked it.

Introducing E-Gas

Audi's e-gas, e-diesel, and e-ethanol are all carbon neutral fuels that can power cars in the same fashion as traditional fossil fuels, but use CO2 as the raw material in the fuel. That means that the amount of CO2 output when the fuel is burnt is the same as the amount that is consumed when the fuel is made. So it doesn't make the environment any cleaner, but it doesn't make it dirtier either.

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Now, we're going to approach this with some skepticism, because the promise of a carbon neutral alternative fuel has come and gone for years and nothing has actually come to fruition.

But Audi is really going through with this. They are currently building a plant in Germany to produce e-gas, and an A3 powered by the stuff will be on the market in Germany next year.

In order to make e-gas, Audi obtains CO2 from a biogas plant that burns organic waste, that way food prices don't rise. Then Audi uses that CO2, which would have entered the atmosphere to make hydrogen through an electrolysis process powered by clean energy like wind or solar power. The problem there is that there is literally no infrastructure for hydrogen refueling anywhere in the world. That's where Audi does something very cool.

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To solve that problem, they add CO2 with the hydrogen in order to synthesize methane. That makes e-gas natural gas, and there is a network for that. The facility that Audi is building for e-gas in Germany with help from Solar Fuel will be able to feed synthetic natural gas into the network on an industrial scale. And that is why Audi is introducing the A3 TCNG, which can run on e-gas or regular gas, with the same performance parameters.

That makes e-gas a carbon neutral fuel. A car emits the same amount as was consumed making the fuel. It's smart.

What about in the U.S. where Audi/VW is attempting to grow its market share? In Hobbs, New Mexico they're making e-ethanol and e-diesel. Once again, by using non food crops and renewable energy, Audi and their partner Joule are working to make carbon neutral, renewable fuels that can work in your car, that you own, now.

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Audi and Joule are using microorganisms, potable water, and CO2 to produce fuels. I'm not close to being a chemistry major, so I'll let Audi describe the process:

The process is relatively simple: use the energy from the sun to convert CO2 and non-potable water into liquid fuels. At the heart of this process are photosynthetic microorganisms (each one of around three thousandths of a millimetre in diameter). However, instead of using photosynthesis to grow more cells, the microorganisms continuously produce fuel. The inputs for this process are sunlight; industrial waste CO2 from sources such as industrial plants and brackish or sea water. Critically, there is no need for agricultural land or fresh water.

Basically, the microorganisms secrete the fuel. And it isn't a hypothesis, they can actually make fuel like this and showed us the plant that they are using as well as samples of the ethanol and diesel.

The hurdles

First off, there is the price component. They want to be equal to a barrel of gasoline. While they didn't divulge the price, I got the feeling that they aren't yet at the point where $100 for a barrel, their goal, was anywhere near. They plan to be at that level by 2020, but that means gas prices will have to stay the same and the plant will be fully scaled up to a level of production that can drive the price that low.

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The other issue is yield. Now, e-ethanol has met it's goal of 8,000 gallons per acre, which is a better yield than most biofuels. But right now, e-diesel is falling short of that goal.

There are also long ranging goals where the fuel would be delivered to houses in order to be an actual power grid, but that part of the plan seemed a bit more nascent and unclear at this point.

Will it actually work?

It's an interesting idea but I'm still a little skeptical. Like we've seen, people have come along and promised huge gains in tech over current fuels only to have it fall flat on its face. Secondly, the yields of the two plants are going to be so minuscule that it will barely be a drop in some sort of proverbial bucket compared to current fuel production.

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But Audi is obviously confident by bringing a car to market that runs on e-gas. It'll be on sale in Germany in the fourth quarter of next year. They also expect their plants to be running at capacity in the summer of 2013.

Most experts predict we're going to have an internal combustion engine in most of our cars for at least the next 25 years, so if it works it could be significant achievement that could help ween us off our fossil fuel dependency without requiring massive shifts in infrastructure and behavior.